J C Penney Company Inc (NYSE:JCP) CEO Marvin Ellison stated earlier this week that the United States Postal Service would be the one holding back e-commerce growth but those claims have been denied by the USPS.
USPS has denied the claims made by Ellison earlier this week where he stated that it was a deterrent to e-commerce. A USPS spokesman wrote in an email to TheStreet stating that the organization has a well-structured network as well as infrastructure. The letter further added that the network and infrastructure would support and facilitate e-commerce growth in the future. The spokesman further pointed out that the agency’s workers delivered roughly 154 billion pieces of mail in the U.S last year alone.
“The Postal Service continually adapts to a dynamic marketplace. We operate an extensive and integrated retail, transportation, processing and delivery network to serve residential and commercial customers,” the spokesman wrote.
Ellison claims shipping companies have led to increased fulfillment costs
Ellison made his statement about USPS during a Piper Jaffray conference held on Wednesday last week. He stated that USPS is the biggest challenge for e-commerce firms such as Amazon.com, Inc. (NASDAQ:AMZN). This is because it delivers more packages to homes in the U.S. than any other shipping organization because it has taxpayer funding.
The J C Penney CEO pointed out that companies such as USPS, FedEx Corporation (NYSE:FDX) and United Parcel Service, Inc. (NYSE:UPS) have contributed significantly to rapidly rising fulfillment costs. He also added that the delivery firms have been failing to increase their capacity to deliver at the same rate of growth as e-commerce. Ellison stated that he expects a supply and demand issue to pop up soon.
The additional content in the email suggests that the shipping firm has been working towards keeping the business going in the future as well as adapting to keep up with the current market trends.
JC Penney stock closed the latest trading session on Monday at $4.84 after tanking by 3.59 percent compared to the previous close.